Proof of Work cryptocurrencies like bitcoin are facing struggles with the wave of ASIC mining hardware. Nakamoto envisioned a decentralized cryptocurrency mining consensus spread across a large pool. But of late it’s turned into a environment where two or three major players reap a large portion of mining profits.

As a result, developers and communities are implementing solutions in a learn-as-they-go fashion. An update from Sia coin developer David Vorick provides a lay of the land and breakdown of the team’s foray into the world of mining with their Obelisk project.

Opposing Viewpoints to the ResistanceLike other projects, the introduction of cheap ASIC miners has introduced headaches for project but also unique solutions to resistance. Projects have historically tried to keep a level playing field for all chip types, including GPUs and CPUs. The work to resisting ASIC take-overs has fallen mostly on algorithm developers. But Vorick and Sia as a team don’t think this is a winning battle. Hardware engineers have the flexibility to design around resistance quicker and cheaper than developers can keep up.

He writes:

“At the end of the day, you will always be able to create custom hardware that can outperform general purpose hardware. I can’t stress enough that everyone I’ve talked to in favor of ASIC resistance has consistently and substantially underestimated the flexibility that hardware engineers have to design around specific problems, even under a constrained budget. For any algorithm, there will always be a path that custom hardware engineers can take to beat out general purpose hardware. It’s a fundamental limitation of general purpose hardware.”

The takeaway seems to be that allowing space for ASIC mining is the path of least resistance. Manufactures like Bitman are willing to produce less than efficient hardware for profitable mining in any way possible, and projects have to come to terms with that.

Other projects, however, have taken different stances. On the other end of the spectrum, for example, Monero created a hard fork that project claims will brick ASIC miners. Manufactures scramble to recoup losses for their miners of Monero’s Cryptonight algorithm, even though retail purchasers mined it at their own peril.

Mining Hardware Manufactures: Willing to Play Dirty for Gainasic miner.

Chinese ASIC manufacturer Bitmain has become the central heavyweight in the cryptocurrency mining industry. Competitors face touch obstacles of price and scale when they go toe-to-toe with the giant. The company has also been accused of setting up secret mining establishments that crowd out any profits for GPU miners.

The centralization of mining is a constant concern for cyptocurrency projects, and critics allege that Bitmain shows little concern for the dangers. Vorick’s post goes in detail as to why he believes this is the case, and he argues that it is because Bitmain’s hardware brings in huge profit margins for the company.

He writes:

“Our investigation into the mining equipment strongly suggests to us that the total manufacturing cost of the equipment is less than $1,000, meaning that anyone who paid $10,000 for it was paying a massive profit premium to the manufacturer, giving them the ability to make 9 more units for themselves.”

So even when mining profits dwindle for their miners, they come out ahead. Always staying one step ahead of algorithms that resist ASICs is a boon to business.

With projects ironing out defensive tools for mining centralization, ideas are flourishing. Aggressive manufactures and mining farms are here to stay, but they will face obstacles from communities working hard to democratize a level playing field in line with Nakamoto’s original vision.